Consumer Confidence Up, Biz Expectations Low

After showing improvement in December, consumer confidence continues to climb. The Conference Board’s consumer confidence index picked up from 102.7 in December to 103.4 for January, while the present situation index increased to 110.9 from 105.7. On the other hand, the expectations index, which had been on the rise last month, slipped from 100.7 to 98.4.

The overall assessment of current conditions for January was a mixed bag as well. Those claiming that business conditions are “good” increased to 26.0% from 24.0%, while those claiming conditions are “bad” rose to 18.2% from 17.8%. Consumers saying jobs are “plentiful” increased to 20.7% from 19.4%, while those claiming jobs are “hard to get” fell to 24.7% from 26.4%. And those anticipating business conditions to improve in the next six months declined to 21.1% from 22.4%, while consumers expecting business conditions to worsen increased a bit to 8.0% from 7.7%.

Even with the conflicting responses, businesses have reason to be optimistic about the survey results, according to Lynn Franco, director of the Conference Board’s Consumer Research Center. “Despite the slight retreat in expectations, consumers’ short-term outlook remains favorable and suggests the economy will continue to expand throughout the first half of this year,” Franco said in a statement. “And recent advances in the present situation index, now at its highest level since May 2002, suggest consumers will not dramatically alter their spending in the months ahead.”

Based on a representative sample of 5,000 U.S. households, the monthly Consumer Confidence Survey is conducted for the Conference Board by TNS NFO. The cutoff date for January’s preliminary results was Jan. 19.

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